Cyber security: The Key Players and Their Strategies

Cybersecurity: The Key Players and Their Strategies
 
Rapid7, LogRhythm and Mimecast are amongst many cyber security firms poised to go public in 2015, to cash in on the enthusiasm shown by investors, after a spate of hacker assaults, as per individuals acquainted with the matter. Shares of cyber security firms have been bullish of late, as prominent companies like Sony Corp, JPMorgan Chase & Co and Anthem Inc scramble to spend more to secure their systems.

Boston-based Rapid7 is one such organization which has more than 3,500 clients, including American Express Co, Amazon.com Inc and Bank of America Corp. Another Boston based company, Mimecast, is an email security firm with 10,000 clients. Its revenues climbed by 30 percent in 2014 to $88.4 million. LogRhythmInc, situated in Boulder, Colorado, provides innovative technology to help organizations screen movement over their systems.

Each of the three organizations have expressed interest to offer shares to people and looking for valuations in abundance of $1 billion, as per certain people who declined to be recognized on the grounds that the arrangements are not yet open.

Rapid7, with investors namely Bain Capital Ventures and Technology Crossover Ventures, has picked Morgan Stanley and Barclays to aid with an initial public offering, the individuals said. LogRhythm, whose financial specialists incorporate Access Venture Partners, Grotech Ventures, Adam Street Partners and Riverwood Capital, has picked JPMorgan Chase and MorganStanley for an IPO in the second half of the year, the sources said.

Mimecast, whose financial specialists incorporate Insight Venture Partners, Dawn Capital and Index Ventures, has addressed some venture banks about an IPO. However, it has not employed any organizations yet.
 
FireEye Inc shares have risen 38 percent this year alone, while QualysInc is up 24 percent and Palo Alto Networks Inc has risen 19 percent. The PureFunds ISE Cyber Security ETF has increased 9 percent over the same period, while the S&P 500 Index is up 1.9 percent. In any case putting resources into cyber security is not without danger.

FireEye's offer cost dove more than 70 percent in under three months a year ago, after Chief Executive Dave DeWalt and different insiders sold shares, prodding financial specialists to investigate the association's accounts and valuation.

The stock had more than quadrupled in the initial six months after its September 2013 IPO, despite the fact that FireEye later reported misfortunes of $121 million in 2013 and $444 million in 2014. Investigators don't anticipate that FireEye will post a full-year net benefit until 2018.

In the midst of high investor enthusiasm for the cyber security industry, FireEye has recouped not long back. However at around $42 a share, the stock stays far beneath its March 2014 high of $97.35.
Veracode, which shields Internet applications from hackers, has chosen banks to lead a potential IPO that could esteem the organization at between $600 million and $800 million, as reported by Reuters in December.

An anticipated big appearance this year is Bit9 + Carbon Black, whose product shields PCs from malware. The firm has not yet procured banks, as per individuals acquainted with the matter. It declined to remark.

As per FBR's Ives, developing cyber security organizations could gain a joined yearly income of $15 billion to $20 billion in three years. That prohibits the slower becoming yet bigger business for conventional cyber security innovation, for example, anti-virus software. Venky Ganesan, managing director at Silicon Valley investment firm Menlo Ventures, said, "The window is wide open for cyber security companies. We have a perfect storm of opportunity." He also mentioned that normal corporate spending on cyber security will ascend from around 0.25 percent of aggregate income to as much as 2 percent of income in the advancing years. 

Reference:
http://www.reuters.com/article/2015/03/20/us-cybersecurity-ipo-exclusive-idUSKBN0MG2ET20150320